Housebuilder says consumer confidence has worsened since its last statement to City in September
Bellway homes has become the latest housebuilder to be hit by the falling housing market. It told the City that sales had fallen 7% in the last four months, and that profits were likely be lower than expected.
Bellway said that sales margins will be “slightly reduced” in the six months to January 2008 on the same period last year in a scheduled interim management statement. The statement said that reservations – customers putting down a deposit on a new house – were 7% lower in the last four months than in the equivalent period in 2006.
Nevertheless the statement said the company could achieve a “modest” increase in the number of homes sold, principally because of its strong forward selling position.
Chief executive Jon Watson told Building the situation had worsened since the last time the company made a statement to the stock exchange in September, with falling consumer confidence since then. “We think it’ll be a result if we maintain our sales volumes. We think that will be outperforming the market.”
Watson said the company’s operating profit margin was likely to fall from 18.7% to 18% in the six months to January. The statement concluded that predictions for the full year’s profits to July 2008 “will have to be reviewed in light of conditions prevailing in spring 2008.”
Bellway’s statement follows similar statements from Taylor Wimpey, Bovis Homes and Barratt.